Sabina Gold & Silver Corp. (the "Company") is pleased to outline the objectives of its 2014 project development and exploration program for its 100% owned Back River project in Nunavut, Canada, as well as its budget for 2014.
The 2014 Back River work program has been estimated to total approximately $19 million and will include a modest drilling program following up on successes in 2013; environmental and permitting activities, development studies and property holding costs. Including corporate general and administrative and other project related costs, the annual budget for 2014 is expected to be approximately $24 million.
In 2013, the Company completed approximately 82,000 metres of drilling at Back River, primarily focused on upgrading and extending the resources for inclusion in the upcoming feasibility Study ("FS"). The results of this drilling were included in an updated Back River Mineral Resource estimate announced early in March.
Additionally, since the completion of the pre-feasibility October, 2013, studies have been ongoing to assess opportunities for project optimization prior to launching the FS. These studies include metallurgical testing, mining methods, sequencing and costs as well as logistics alternatives. These studies are expected to be completed during the month of April. The studies, updated mineral resource estimate and 2014 drilling will also be included in the Back River FS.
"We have a very good foundation of information with which to launch our FS," said Rob Pease, President & CEO. "Our objective was to accomplish most of the work to support the FS in 2013 and early 2014 and we believe we are well positioned to advance the project through the FS and final permitting phases. One of the opportunities identified last year was a new high grade resource at the Echo zone which we believe could have a positive impact on early mine life economics. We have decided to launch a focused drill campaign at the Echo deposit to upgrade and possibly increase the resources for inclusion in the FS. While we are there and the camp is mobilized, we will take the opportunity to test some interesting targets around the Echo and Goose Main zones. We believe these could all be value add targets in the early mine life of the project. We are excited about the next phase of advancement for the project and look forward to launching our FS."
The priority for the Company in the next 18 months is to advance Back River through feasibility and environmental assessment, de-risking the project while minimizing cash consumption. During the year, the market can look forward to updates on the project, drilling results from the Echo Zone and permitting progress.
The Company expects to end 2014 with a cash balance of approximately $34 million. In 2015, it is anticipated that another $11 million will be required to fully engineer and permit the project (including corporate General and Administration costs, but assuming no exploration). The Company is well positioned to retain a significant treasury through to the end of 2015. During 2014, project financing options to construct Back River will be explored so that the Company is in position to move forward once the project has been de-risked.
2014 Back River Work Program
Goose Camp is now open with a view to having three drills up and running on the project by April 20th, 2014.
- To mobilize a drilling program to convert and possibly increase resources at the Echo deposit;
- To drill test two or three high potential exploration targets for new resource additions to the Goose property;
- To complete ongoing optimization studies on the project that began in 2013, i.e. metallurgical testing, mine sequencing and capital and mining cost studies;
- To incorporate results of Echo drilling and optimizations studies into the FS to be launched later this year and completed in the first half of 2015;
- To continue necessary environmental and baseline work for the Final Environmental Impact Statement;
- To continue with community engagement for the project;
The Echo Zone, located approximately 1.5km southwest of the Goose Main deposit and strategically located near planned mine infrastructure was initially discovered at Back River when Sabina purchased the property in 2009. With the subsequent discovery of the Llama and Umwelt deposits the Echo zone was not fully advanced as an exploration target.
Based on its proximity to other Goose deposits and it's high grade nature, (e.g. holes 13GSE435 returning 13.13g/t Au over 12.55m and 13GSE395 returning 7.73g/t Au over 12.20m), in 2013, re-interpretation of prior drilling results led to a renewed exploration and resource definition program that was successful in defining a mineral resource at Echo. The zone is open to depth and laterally to the north. The 2014, 6000 meter drill program is designed to upgrade a portion of the inferred resources at Echo to the indicated category as well as explore deposit extensions.
In addition to the Echo drilling, an exploration drilling program of approximately 2500 meters is planned to test two to three high priority targets located in and around the existing Goose deposits. Positive attributes of the targets have been defined using the results from ongoing geologic modeling in combination with geophysical data sets and the results of previous drilling programs.
Based on the results of the PFS last fall, the Company decided to embark on a FS for Back River. Originally, the Company had anticipated launching the FS late in 2013 and completing the FS by the third quarter of 2014. However, as the Company has determined the FS would be best served by including the updated resource estimates, metallurgical testing, and results of other ongoing optimization studies as well as Echo drilling, the FS will likely be launched early in the second half of 2014 with an expected completion date in the first half of 2015. The environmental assessment and permitting process is ongoing and is being closely coordinated with the engineering FS schedule.
These schedule changes will result in approximately a six to twelve month delay in the proposed project start up currently outlined in the PFS.
Back River Technical Report
On March 4, 2014, the Company announced an updated Mineral Resource Estimate on the Back River Project. The corresponding 43-101 technical report entitled "Mineral Resource Update for the Back River Gold Property, Nunavut, Canada" was filed on www.sedar.com on March 27, 2014 and can also be found on the Company's website at www.sabinagoldsilver.com.
The Qualified Person as defined by NI 43-101 as pertains to the Back River Project, is Angus Campbell, P.Geo, Vice-President, Exploration, for the Company.
True widths for the intercepts reported in this news release have not yet been determined.
Diamond drill core was sent to TSL Laboratories in Saskatoon, Sask. Quality control is monitored on a continual basis and utilizes a system of standards, blanks and duplicates to ensure analytical accuracy. The protocols and procedures used in 2013 are the same as those used in earlier campaigns by Sabina Gold & Silver Corp. and have been deemed appropriate in the Company's 43-101 compliant resource reports.